Council Adopts South Lake Union Compromise

The city council adopts a compromise proposal increasing the amount developers will have to pay in exchange for more density in South Lake Union.

The city council, meeting as the special committee on South Lake Union, unanimously adopted a compromise incentive zoning plan for South Lake Union (for our extensive previous coverage, start here) this afternoon that would allow developers to build taller, denser buildings in the growing neighborhood in exchange for new, on-site affordable housing or payments into an affordable housing fund.

The proposal the council committee adopted is most similar to a compromise proposed by council member Mike O'Brien that will require developers to pay $21.68 into an affordable housing and child care fund for every additional square foot of density above what's allowed under existing zoning rules. The proposal would increase the requirement, known as a "fee in lieu" of building affordable housing, annually according to the rate of inflation.

Mayor Mike McGinn proposed a much less ambitious proposal (known as "incentive zoning" because it gives developers an incentive—taller buildings—to pay for things like affordable housing, child care, and open space) that would have required developer to pay just $15.15 per square foot of additional residential density. (The proposal also requires developers to pay more for additional height in commercial buildings.)

As we reported last week, council members were split on how much of a per-square-foot payment the city should require, but agreed that the mayor's proposal failed to meet a basic goal: Giving developers an incentive to actually build housing on site, instead of simply paying into a fund. So far, developers who've taken advantage of existing incentive zoning rules in South Lake Union and downtown have universally chosen to pay into the fund instead of building actual affordable housing, suggesting that it's the per-square-foot price has been too low.

That troubles council members not just because it's a lucrative break for developers, but because private companies are better equipped to build "workforce" housing—housing affordable to people making up to 80 percent of the area median income (AMI), or about $45,000 a year for an individual—than nonprofit housing developers, whose expertise is building low-income housing with wraparound services, like job training and social services, that higher-income renters don't need.

"It's not the big leap forward that I was hoping for, but it is a step in the right direction," council member Nick Licata, who had proposed a much larger fee of $96 per square foot, said.

Several amendments by Licata, including proposals that would promote the preservation of existing low-income housingand expand the incentive program to require half of any new units be affordable to people making no more than 60 percent of median income (as opposed to 80 percent), failed.

Acknowledging that "These are not the kinds of figures that will actually get us to the [affordable housing] that we need in South Lake Union, council president Sally Clark suggested that the council may want to revisit Licata's 60-percent proposal in the future.

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